a seattle startup

This is a continuation of my previous post on recruiting & hiring in a startup. In Part 1, I shared my thoughts on recruiting tactics – Part 2 will focus more on what I believe are qualities to look for in a lead developer for an early stage startup. Unlike recruiting in a large firm, hiring the right people in a startup is critical – there’s no one to carry someone else’s dead weight and everyone plays a vital role in the success/failure of the company. I came from a boutique consulting firm and had the opportunity to be a part of the recruiting process. We had a very stringent system that tested for 3 primary characteristics in a candidate: intelligence, ethics, and fit. These were the same metrics we used to look for in a lead developer.

Our approach to recruiting a lead developer:

1. Find someone that loves our idea

• It’s no secret that we’re better at what we do when we love the work. When we were looking for our lead developer, we wanted to make sure he/she loves the idea, believes in the idea and is excited to work on the idea. If they’re a fantastic developer but not into our idea, they won’t make it good.
• What closes the deal for me is when the developer comes up with ideas on how to improve your product during the interview. They don’t have to be phenomenal ideas now, but I know they will keep innovating in the future as opposed to just building what you tell them to build.

2. Someone who knows what they don’t know

• One of the most valuable pieces of advice I’ve gotten in recent years is that “a part of being smart means knowing what you don’t know”. As I developed my professional career in the past 2 years, I’ve learned a lot about business, analysis & structured problem solving. In addition to that, I’ve learned that even the things I’m good at, there’s a lot I don’t know.
• Relating this to recruiting, we’ve came across a few developers who thinks they know a lot about the business side of thing but were dead wrong on issues and too stubborn to see that. Definitely not someone we wanted to work with. (don’t get me wrong, not all developers are business idiots, I’ve met several business savvy ones)

3. Ability to deal with disagreements & move forward when a decision is made

• In a startup, decisions need to be made quickly and work needs to get done even faster so you can’t afford to have disgruntled, stubborn teammates who refuse to do things another way.
• Disagreements will arise, we wanted to make sure whoever we hired is able to handle disagreements and quickly move forward even if decisions are made against their preference.

4. Ability to not take things personally

• Again, disagreements and arguments will occur & stress levels will be high – everyone is trying to do what’s best for the company so we wanted someone who won’t take things personally when their ideas get shot down.

5. A good fit for the culture of the startup

• At a small company, there’s nothing worse than having someone who doesn’t fit in with the culture. Before we started recruiting, Adam & I sat down and discussed the culture we wanted to build: young, fun, work hard/play hard, high on initiative, low on rules, always do what’s right.

6. Integrity & sincerity

• This is harder to explain since I’m not a psychologist but we judged this based on their responses to questions. Whether it’s a question on how they like to work, how they handle disagreements or asking them to estimate time needed to complete the project, we looked for people who gave us honest answers rather than what we wanted to hear.
• Checking references and asking the same questions you asked the candidates is also a good test.

7. If you’re not a technical founder, get a technical person to help you interview

• If you’re not a technical founder, it’s definitely challenging but not as big of a road block as some make it out to be, just a bit more time consuming. Adam & I share some knowledge of programming languages, website design, IT infrastructure and other basics but we’re not developers. We can’t accurately assess the technical capabilities of a developer so I got a friend of mine who had spent several years as a lead developer at another startup to help us interview.
• However, we did the initial interviews ourselves to make sure we have someone who is a good fit for the culture of our startup.

8. Give the developer equity & don’t be stingy

• Regardless if you’re able to pay a developer at their market rate or not, give them a fair share of equity because it’s a big risk to join an early stage startup – especially one that doesn’t have a single line of code written in our case.
• We came up with 3 different scenarios for a salary/equity mix and allowed our developer to choose the comp package he wanted.
• If the developer prefers a high salary and no equity, don’t hire them. Anyone who believes in the idea should prefer equity.
• Don’t be stingy. Do the right thing and offer a salary/equity mix you would personally accept if you were on the receiving end.

It’s been over two months since Adam & I started doing this startup full time and I had sometime this weekend to reflect on some of our initial ups and downs. Our lowest point to date was the first week of work – we lost our first teammate on day one. We knew a lot of people would say no to us but we weren’t prepared for our first teammate/employee to say no to us so quickly. I won’t go into too much detail on why our first developer decided to back out, but I will say that startups are not for everyone. When the reality of the risk kicks in, some people develop an apprehension towards that risk and I completely understand that. Nonetheless, I’m thankful that he was honest and quit on day one before any progress was made.

Not a great way to get started. Adam and I sat here with our work plans and project scopes in hand starring at each other and wondering what to do. So much for the work plans, we set everything aside and made recruiting our #1 priority. We scoped out our recruiting strategy and started executing. On the 3rd day of work, I still vividly remember walking in the rain from college campus to college campus posting flyers on bulletin boards. It was a shitty feeling and the uncertainty of when we will have a complete team made it worse.

Looking back, I’m glad all this happened. Through the recruiting process, we had the opportunity to sharpen our pitch, develop recruiting skills (which we will surely need again) and most importantly, I strongly believe we ended up in a much better position with Hedley as our lead developer.

For those of you who are just here to find recruiting advice for a low budget tech startup, here’s a few things I would recommend from our experience:

1. Develop & test your pitch before you start recruiting
   1. This is a tough one because you get better as you pitch more people and get more feedback & reactions. I think it would be helpful to pitch to some smart close friends you can trust and get some honest feedback and reactions from them first rather than testing the pitch on potential hires.
2. Don’t waste money on a recruiter
   1. You can do whatever the recruiters do. One thing I learned from working at Lake is you can figure out just about everything – if you’re smart, you can figure out most things 80% of the way by being aggressive and creative – sometimes you can even do it better than the “pros”, especially on something like recruiting.
   2. Jason Calacanis has a good article on how to save money, he also believe recruiters are a waste of money.
3. Leverage your personal networks
   1. Dig deep in your Outlook contacts, Facebook & LinkedIn profiles and you’ll likely know someone who is in the field or has connections in the field.
4. Target college campuses
   1. Post job descriptions on bulletin boards in common areas as well as specific departments
   2. Talk to career departments and ask for mailing lists – sometimes they will ask for a job description and email blast departments for you
   3. Look up school directories for students and professors and email them for interest & referrals
5. Look up local developer groups and forums online
   1. We found Hedley through a Ruby on Rails group – there’re plenty of these for all kinds of professionals
6. Use Craigslist cuz it’s cheap – milk the expensive ones creatively
   1. It’s only $25 to post a job on Craigslist, much cheaper than Monster.com and CareerBuilder
   2. Use the free trials on recruiting sites like Monster.com or CareerBuilder – some of them will give you a few free resumes. Others will let you search for resumes but not give you names & contact info – instead of paying for the contact info, you can Google keywords from these resumes and find these people’s personal websites, LinkedIn profiles or other public online presence.
7. Write personal emails whenever you can
   1. If you have the time, read a few blogs and websites and write a personal email to potential recruits. Even if these people aren’t looking for jobs, they’re more likely to respond to your emails and give you referrals if you make the emails personal.
8. Don’t stop recruiting until you have someone on board
   1. It’s easy to feel a sense of relief and get lazy on recruiting when you meet someone good. After all, recruiting isn’t that fun. However, even when you find someone who seems like a great fit and shows an interest in the position, there’s still a high chance they won’t work out for a number of reasons. Keep recruiting until someone gives a full commitment with all the terms worked out.

I’ve asked a number of people this question and done a fair amount of reading online and haven’t come across a compelling reason why we shouldn’t be in stealth mode during development. Being stealth protects our idea. It guards against the possibility of having the idea stolen (though extremely rare), but more importantly, it prevents competitors from capitalizing on our innovations. The anti-stealth arguments generally go like this:

• the idea doesn’t matter, it’s all about the execution
• it’s very very unlikely for someone to steal your idea
• you can generate buzz pre-launch and have potential users lined up
• if you tell people about your idea, you can get feedback, make improvements, and launch a better product

These arguments just didn’t cut it for us – the risk reward isn’t very compelling. Yes execution is more important than the idea but just because the probability of having our idea stolen is low doesn’t mean it’s zero – the lottery still pays winners on Wednesdays & Saturdays. Unless the idea is truly revolutionary and barriers to entry are high, you probably have competitors and you likely have strong differentiation or at least believe you have it. The risk of competitors implementing the features that makes you different is much more material than having your idea stolen. The more you publicize your idea, the higher the odds your competitors will hear about you. If you don’t aggressively publicize your idea, then you’re safer with competitors but you won’t get the buzz.For us, we’re working on a consumer web application so we don’t think the prelaunch buzz is that critical. There’re so many powerful vehicles online that can be leveraged to quickly generate buzz & drive traffic, we don’t think the benefit of prelaunch buzz justifies the risk. We’re diligently doing our homework and creating a solid marketing strategy ready to execute on day 1 or launch. With consumer websites, it’s always hard to tell what will happen until after launch – the feedback we would get from publicizing our idea is unlikely to add that much value. We used our personal networks for feedback and it’s been extremely helpful. Here’s another article I recently came across on this topic by Seth Levine and found it helpful.

My name is Leo and this is my blog. Through this blog, I intend to document my life as a startup founder and share my mistakes and lessons learned. I hope to inspire other would be entrepreneurs as well as exchange ideas & advice with those close to the startup community. Our startup is still in stealth mode (entry on “Why Stealth” to come) so I will not directly discuss the idea until our launch this summer.

On January 31, I quit a management/strategic consulting job that I loved to pursue a startup. It was a tough decision because I enjoyed the work, enjoyed working with some of the most talented people I’ve ever met and had many opportunities had I decided to stay. I will outline how I arrived at my decision in this post. Every time I make major career changing decision, I always think of the worst case scenarios and worse possible outcomes – I believe if you’re prepared for the worst outcomes and can accept the consequences, then you will unlikely regret taking that step.

Three primary reasons why I quit a 6-figure job to do a startup:

1.       Timing/Risk Tolerance

There’s no better time to do a startup than when you’re in your 20s and it’s the only time in life when you have the freedom to be independent and do whatever you please. When you’re in school, most of us are financially dependent on our families. When you get married and have kids, you have responsibilities and lower risk tolerance. The few years between graduation and marriage, you’re financially independent and no one to really take care of but yourself.

When evaluating whether I should quit my job to do a startup, I noticed a sharp contrast in advice from those with entrepreneurial experiences and those who didn’t. Those who hadn’t started a company advised me to work a few more year, develop more experience – those who were young entrepreneurs themselves encouraged and supported my decision. After doing some research on my own, it became clear that I this is what I wanted to do. I was prepared for the emotional ups & downs, prepared to work hard and most importantly, I wasn’t afraid to fail and start from scratch doing something I love.

Paul Graham has a couple of great essays that inspired my decision: How to Start a Startup & Why to Not Not Start a Startup. My favorite quotes are:

        “If you try something that blows up and leaves you broke at 26, big deal; a lot of 26 year olds are broke.”

        “But the best way to get experience [doing a startup] if you’re 21 is to start a startup” (I’m already 25 so a bit late on the train)

My high school buddy Justin also inspired me. Justin had started a company (Kiko) right out of college to make an Ajax calendar, they worked for a year and things were looking up until Google came out with their own Ajax calendar. Kiko wasn’t wildly successful but they sold on ebay for $250k and the founders got a decent 1 year salary. Most importantly, they did something they loved and developed the contacts and skills to move right onto their next startup, Justin.tv.

2.       The Idea & the Plan

I always hear from people that ideas are a dime a dozen; it’s more about the people and the execution. Though I wholeheartedly agree with this, I believe it’s more true from an investor’s point-of-view as they’re constantly being bombarded with ideas. As a founder, the idea is crucial. Without a solid & well researched idea and a solid plan, I wouldn’t’ve quit my job to do this. I’ve batted around hundred of ideas with friends over the years only to arrive at 3 common conclusions: too many competitors doing the exact same thing, there’s no market for our product – alternatives are working well, and there’s no way to effectively monetize.

When my partner Adam & I came up with our idea back in Sept/October, we spent nights & weekends researching the idea and tried to poke holes in it until we were certain that it’s able to hold water. Maybe it’s due to our business backgrounds but we didn’t want to be another “me too” web startup with a cool application but no clear vision and strategy for monetization – the web is already too crowded for that.

3.       The Team

An equally important part of my decision to pursue a startup is because we had a great team. Although it was just me and Adam with no developer, I knew we could make this happen. We both had an obsession with internet startups & web applications and complimented each other’s strengths & weaknesses very well. When we discussed our roles in the company, we naturally gravitated to our interests & strengths and clearly defined our positions. Adam is the savvy CEO with solid analytical skills, passion for online marketing, and great people skills for interacting with investors, customers and the media. I’m the COO, I like to crunch numbers, guide product development, manage internal operations and come up with wild ideas. (Few days ago I was surprised to find that Brad Feld doesn’t believe in COOs, but after reading his thoughts, we seem to fit well in his 2% exception.)

In an early stage startup, there shouldn’t be too much redundancy in skills - when you’re strapped for cash and low on resources, redundancy just makes it more expensive to get the same work done.